Banks screw up mortgages and ignore bankruptcy rulings

By Jack, on September 30th, 2013

The New York Times columnist, Gretchen Morgenson, reported two examples of judges losing patience with mortgage lenders. In one situation, in Boston, federal Judge Young felt that he had to dismiss a case in which the borrower had claimed that Wells Fargo had been guilty of predatory lending. Judge Young apparently agreed with the borrower but felt that a “technicality” forced him to dismiss the suit.

However, before he did, Young told the Wells Fargo lawyers that he did not agree with their aggressive litigation conduct and that that they would have to provide a “corporate resolution” showing that the Wells Fargo board approved of the lawyers’ behavior. They are appealing.

In another case Bank of America continued active and aggressive collection efforts against a New York couple who had their debt discharged in bankruptcy. A federal bankruptcy judge told the bank to pay all the legal fees of the couple plus $10,000 a month until they stopped trying to collect a debt that was no longer owed.